Case Studies
Spansion, Inc.
This publicly held multi-billion dollar international semiconductor provider engaged the firm to analyze its financial operations, recommend fixes for its significant losses and evaluate the management team. It filed Chapter 11 bankruptcy in March 2009 with approximately $30 million cash on hand. Its publicly traded bonds were selling at 30% of par. It reported a loss of $433 million, or 0.30 a share, at the end of 2008. As CRO and interim CFO, we were responsible for the review, analysis and development of strategic business plans; cash flow projections and feasibility studies in connection with the overall potential for restructuring success, as well as claims processing, liquidation analysis, and contract reviews. In its latest reporting quarter, Spansion announced earnings of $30 million and has in excess of $350 million in cash. Bonds currently trade at 129% of par.
Consolidated Freightways
Once the third-largest trucking company in the U.S., Consolidated Freightways filed a liquidating Chapter 11 in September 2002. At the time, the company had approximately 110 facilities throughout the U.S., Canada and Mexico. As part of our role as interim CEO, our objective to sell excess trucking terminals, warehouse facilities and offices as well as the sale of CF’s Canadian and Mexican trucking operations, we undertook a rigorous analysis of approximately $500 million in assets, analyzed and structured various business scenarios under which the assets might be attractive to buyers, assessed various bids and conducted viability analysis in regard to prospective buyers. Seven consultants worked just under two years to complete the project.
CalComp Technology, Inc.
A publicly held subsidiary of Lockheed Martin
Having determined that its resources could be used to better advantage, we – serving as interim CEO — were asked to study the company’s businesses in the U.K., Europe, North America and Asia, conduct feasibility studies to determine the best course of action to maximize asset values and design and implement programs to divest assets, sell businesses or wind them down. The value and potential of the businesses, both as ongoing entities or wind downs, were analyzed and evaluated under a number of scenarios against targets set by the parent company. Working with six consultants, the various businesses and related real estate, which were valued in excess of $250 million, were either sold, liquidated or wound down over a period of four-and-a-half years with significant savings in excess of the targets originally anticipated by the company.
Barneys New York
Barneys had experienced questionable financial practices. As interim President and COO, we conducted a comprehensive review of the company’s business, including a rigorous review and assessment of existing systems, reporting and practices, and existing management. We were subsequently able to restore credibility with vendors and the financial community, negotiate new financing, recruit and develop a new senior management team and accomplish the turnaround of this highly visible, $400 million dollar (enterprise value) company with real estate holdings and commitments in major U.S. cities. Five consultants worked for a year-and-a-half and the company ultimately exited bankruptcy with new ownership.
Wells Fargo
The good bank-bad bank concept involves “cleaning up” the balance sheet of the good bank by transferring to the bad bank assets that are illiquid, non-performing or otherwise result in write-downs and depleting capital. We were asked to assist the client in separating its problem loans from its health assets. We were also consulted with regard to determining the level of capital required to fund the bank as it worked off the loans. This involved a review of the asset mix, valuation of the assets and anticipated loss levels on the assets and a number of other factors regarding pools of transferred assets.
Sahlen and Associates/Globe Securities
Globe Securities was at one time the third largest security services company in the nation. Recruited by the Board of Directors after members of the senior management team were convicted of securities fraud, we brought in a new management team to restore profitable operations, restated financial statements and reconstructed financial and operational data. This resulted in the strategic sale of Globe Securities to a competitor, Borg Warner Security.